News
All bets off in racetrack ATM/kiosk project
An attempt to bring ATMs and kiosks together at horse racing tracks has ended, but at least one of the parties involved in the aborted effort sees a future for this convergence.
January 15, 2002
If there is a segment of the sports and gaming industries where the convergence of kiosks and ATM machines make sense, then it is horse racing.
Bettors have an incessant need for betting and handicapping information, making information kiosks relevant. And they cannot make their wagers if they are low on funds, so the ATM is a fixture at practically all American racetracks.
But the first attempt to merge the complimentary functions of the kiosk and the ATM at the racetrack has pulled up lame. On Jan. 8, TrackPower Inc. (OTCBB:TPWR) announced that its management service agreement with Post Time Technologies Inc. had been terminated.
The two companies spent most of 2001 developing a network that would combine Post Time's race replay kiosks with ATMs supplied and operated by ISO 4Cash ATM Services Canada Inc., another TrackPower partner. But the arrangement resulted in just one ATM being deployed, at standardbred track Elmira Raceway in Elmira, Ontario, Canada. A race replay kiosk was not included, though the long-range plan was to develop machines that offered this distinctly dual functionality.
TrackPower, which also terminated its agreement with 4Cash ATM, plans to move in a new direction. Post Time will continue to focus on its replay and information kiosks, but is still interested in the convergence of ATMs and kiosks. For now, 4Cash ATM will focus on ATMs, but will not rule anything out.
"We still see the ATM-kiosk combination as a viable business model," said Post Time President Hardave Gill. "We're currently in contact with several potential ATM partners."
TrackPower chairman and chief executive officer John Simmonds remains on the board of 4Cash ATM's parent company, Pivotal Self Service Technologies Inc., but he said the kiosk sector no longer holds an attraction for him.
"We're completely out of the kiosk business," he said. "We're leaving it. It certainly wasn't working for us."
The settlement
TrackPower ended its arrangement with both companies - though Simmonds remains on the Pivotal board - granting Post Time two million shares of common stock in lieu of a $180,000 termination fee. TrackPower stock was trading at 13 cents midday on Jan. 9 after beginning the week at eight cents.
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Post Time Technologies Inc. plans to continue deploying race-replay kiosks such as those installed at Keeneland Racecourse in Lexington, Ky. |
In the end, an inability to push beyond Elmira imperiled the arrangement, according to Post Time's Gill. He said the management agreement between Post Time and TrackPower fell short of expectations because the level of business needed to make the arrangement viable was never developed.
Post Time is no longer involved with the ATM at Elmira Raceway, Gill added.
"From our standpoint, we identified a number of business opportunities for new and current clients," Gill said. "The ATM partner was slow in providing information. We didn't have a lot of confidence in the ATM partner."
Steve Cussons, 4Cash ATM president and chief executive officer, believes 4Cash ATM never had a chance to show off its chops.
"That's an opinion that simplifies a complicated arrangement and is an unfair way of evaluating it," Cussons said of Gill's comments. "The opportunities weren't formally introduced to allow us to take advantage of this arrangement."
He doesn't rule out future racetrack ATM deployments. "There was a mutual agreement to end it and let each of the companies determine what they wanted to grow their businesses. Are we interested in offering service to racetracks? Sure," he said.
Planning ahead
Post Time's immediate focus is on new kiosk initiatives. Working with partners such as kiosk development company Info Touch Technologies Inc., Post Time will continue developing and expanding its line of racing information kiosks. Post Time and Info Touch in December entered into an agreement to develop a new kiosk that will integrate handicapping information and other racing-related services with Post Time's replay system.
Post Time currently has replay kiosks deployed at Keeneland Racecourse in Lexington, Ky., Turfway Park in Florence, Ky., Emerald Downs in Auburn, Wash., and Prairie Meadows Racetrack and Casino in Altoona, Iowa. Gill said the company has reached tentative agreements to place other kiosks, but would not disclose which tracks are involved.
Eventually, Gill would like to see his company develop Web-enabled kiosks and a pay-per-view service for racing and other aspects of the racing industry, such as horse sales. He said the end of the Post Time-TrackPower pact gives his company the needed room to pursue those opportunities.
"It really has an impact on us," he said. "At Post Time we can really get on with business. We still see the ATM-kiosk model as a good model."
A new plan
TrackPower, which began life in the late 1990s as a satellite-based racing and wagering television network but eventually abandoned that model to focus on the ATM-kiosk concept, appears ready to change its focus once again, though it is being vague on the details. The company signed an agreement to purchase the Internet sports statistics site Sportscalc.com Ltd. in October, but has not specifically disclosed what its plans for the site are.
According to its Web site, TrackPower finished fiscal year 2001 with a net loss of $6,051,864 on revenue of $96,061. The company had estimated it would achieve revenue of nearly $16 million and net income of $3,349,000 by 2004.
"TrackPower has identified an opportunity in a related field and is pursuing an acquisition that will provide the company with revenues and earnings," according to a news release issued to announce the end of the Post Time agreement.
